An Ode to Old Hollywood Upon Its Possible Demise

It was a curious juxtaposition March 22. I was touring the old locations — some of which still exist and are recognizable — of the early Laurel and Hardy films — films from the very beginning of the motion picture industry. We looked at Main Street in Culver City where so many films from the Hal Roach studio were shot. We looked at the famous Music Box Steps, where the comic duo lensed one of their most memorable sequences.

The Music Box Steps, famed for their appearance in a Laurel and Hardy film, still exist in the Los Feliz neighborhood in Los Angeles.

At the same time, the venerable studio Fox was being subsumed and forever changed by an acquisition deal in which Disney would take over the studio’s content and Fox retain the lot — to whatever purpose it wanted. Who knows what will happen to that historic lot?

And thousands of Fox employees had either already learned, or were awaiting, their fate, as the studios combined and got rid of personnel in duplicative departments.

The next Monday, March 25, Apple announced its entry into the content production business, with no less than Steven Spielberg, J.J. Abrams, Oprah — and Big Bird — backing its entry.

Looking down the Music Box Steps.

The old studio system is, if not dead, under attack. The new studio system is likely to include tech companies keen to leverage their distribution power to deliver content. Instead of Disney, Fox, Universal, Sony, Paramount and Lionsgate, will the new order be dominated by Apple, Amazon and Netflix?

“We feel we can contribute something important through great storytelling,” said Apple CEO Tim Cook.

It remains to be seen. Since when have Apple and the other tech companies been storytellers? For now, they are buying great storytellers with Wall Street money.

Near the end of the Laurel and Hardy tour, we saw a small plaque that recognized the Hal Roach studio that produced the comic duo’s films. The studio lot had been torn down, but had been remembered on this one small plot of land via a plaque. It made me think about what studios would be plaques 100 years from now — and what venerable names would be reduced to engraved remembrances.

Disney’s Iger Cites ‘Historic Day’ Closing Fox Acquisition

Following the official completion of the Walt Disney Co.’s $71.3 billion acquisition of 20th Century Fox Film Corp. and related businesses at 12:02 a.m. ET March 20, Disney CEO Bob Iger sent out an internal memo to combined staff calling the deal “a historic day for our company.”

The histrionics of the merger are just beginning in what could reportedly result in the elimination of more than 4,000 positions.

“I wish I could tell you that the hardest part is behind us; that closing the deal was the finish line, rather than just the next milestone,” wrote Iger. “What lies ahead is the challenging work of uniting our businesses to create a dynamic, global entertainment company with the content, the platforms, and the reach to deliver industry-defying experiences that will engage consumers around the world for generations to come.”

Aside from the previously reported high-profile departure of 20th Century Fox Film chairman/CEO Stacey Snider, studio vice chairman Emma Watts, Elizabeth Gabler, head of Fox 2000, and Steve Gilula and Nancy Utley, co-heads at Fox Searchlight, are transitioning to Disney.

Other senior executives making the move include Andrea Miloro and Robert Baird, co-presidents, Fox Animation, and Vanessa Morrison, president, Fox Family. All report to Alan Horn, chairman Walt Disney Studios, and Watts.

In his memo, Iger called for patience during the integration process, which he said would impact some businesses more than others.

“We may not have answers to all of your questions at this moment, but we understand how vital information is and we’re committed to moving as quickly as possible to provide clarity regarding how your role may be impacted,” he wrote.

The deal includes 20th Century Fox, 20th Century Fox Home Entertainment, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s television creative units, 20th Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Tata Sky and Endemol Shine Group.

As part of the deal, Disney has agreed to sell 21st Century Fox’s Regional Sports Networks.

Disney’s $71B Fox Acquisition Effective After Midnight

The Walt Disney Co. announced that its $71.3 billion purchase of 20th Century Fox Film Corp. officially goes into effect at 12:02 a.m. ET on March 20.

The deal includes 20th Century Fox, 20th Century Fox Home Entertainment, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s television creative units, 20th Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Tata Sky and Endemol Shine Group.

As part of the deal, Disney has agreed to sell 21st Century Fox’s Regional Sports Networks.

Disney is also acquiring approximately $19.8 billion in cash and assuming approximately $19.2 billion of debt of 21st Century Fox in the acquisition. The deal price implies a total equity value of approximately $71 billion and a total transaction value of approximately $71 billion.

“This is an extraordinary and historic moment for us — one that will create significant long-term value for our company and our shareholders,” Disney CEO Bob Iger said in a statement. “Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the preeminent global entertainment company, well positioned to lead in an incredibly dynamic and transformative era.”

 

 

Netflix’s Ted Sarandos Says Apple, Disney ‘Very Late’ to SVOD Ballgame

Having invented the subscription video-on-demand business (with Roku) more than 10 years ago – with service in more than 190 countries, Netflix doesn’t appear to be worried about pending streaming competition from Apple and Disney.

Speaking March 18 at a media event at Netflix’s Los Angeles headquarters on Sunset Boulevard, CCO Ted Sarandos said he would “reserve comment and judgment” on the March 25 Apple announcement and separate Disney+ streaming media platform rollout later this year “until we see it.”

Netflix’s Los Angeles headquarters on Sunset Boulevard

Indeed, Netflix has long welcomed streaming competitors, including the rollouts of HBO Now, Showtime OTT, Amazon Prime Video and Hulu — characterizing the services as validation of the OTT video market in a pay-TV ecosystem.

Yet, Disney and Apple are not niche brands. Disney in recent years has dominated the box office through its Marvel and Lucasfilm (i.e. “Star Wars”) subsidiaries.

Disney last year ended its landmark movie distribution deal (and more than $300 million in annual license fees) with Netflix in part to solidify movie content offerings for its subscription streaming service.

Apple, which literally created markets for consumer electronics through  iTunes, the iPhone, iPad and Apple Watch, among others, has been slow to enter SVOD in large part because the late Steve Jobs considered streaming video a hobby.

“We’ve been competing with 500 channels of cable and penetrated nearly every household in the world for a long time,” Sarandos said, as reported by Deadline. “So, it’s the same stable of competitors; just very late to the game.”

Cindy Holland, VP of originals, who has been around Netflix about as long as Sarandos, said Netflix’s strategy to think locally and act globally when it comes to mining and distributing original content such as “Casa De Papel” and “Delhi Crime” underscores the streamer’s evolving subscriber.

“We are trying to reflect our audiences around the world,” said the pragmatic Holland. “We have a long way to go. You can’t rest on your laurels too long.”

Disney+ Is a Safe-Cracker

Walt Disney CEO Bob Iger’s announcement that the studio would abandon its long-standing “vault” strategy for its upcoming subscription streaming service is perhaps one of the most shocking shifts in an industry rocked by change.

At the March 7 shareholder meeting in St. Louis, he said that the studio would pull movies from its vault and offer them all on the pending Disney+ service.

“At some point fairly soon after launching, [Disney+] will house the entire Disney motion picture library,” Iger said. “So, movies that have traditionally been kept in the vault, and basically been brought out every few years, will be on the [streaming] service.”

The vault strategy, exploited by Walt Disney Studios Home Entertainment for decades, involved putting select movies, mostly animated classics such as BambiThe Lion King, and The Little Mermaid, on retail moratorium for several years to wait for a new crop of children to come along. Oft termed “treasures” or “platinum” or “gold” editions when they emerged after seven years or so for a re-release, they were snapped up at $20 to $30 apiece by eager parents, purchases made all the more urgent by the studio warning that they would soon go back into the vault. When these classic films came out, often in a new format, they shot to the top of the sales charts.

It took the digital entertainment revolution to finally crack the Disney vault — but is it a heist? If enough subscribers sign on to Disney+ at a high enough subscription price, offering a panoply of content may be a lucrative investment, but it could also devalue some of the studio’s most valuable jewels.

Research: Strong Consumer Interest Expected for Disney+ Streaming Service

Disney’s pending subscription streaming video service is projected to generate wide consumer appeal — if it is priced right, according to new data from The Diffusion Group.

When asked about the likelihood they would sign up for “a Netflix-like service” that included movies from Disney, National Geographic, Pixar, Marvel and Lucasfilm (Star Wars); Disney TV shows for children; and original content, 43% of survey respondents said they were likely to sign up, while 27% very likely to subscribe.

TDG surveyed 1,949 adult broadband users randomly assigning one of three price points for the service, either $5.99, $7.99, or $9.99 per month. Those under the age of 35 are twice as likely as their older counterparts to be strongly interested in Disney+, as are those with children under 18 living in the home.

“Based on our research, Disney+ will enjoy strong early demand,” Michael Greeson, president of TDG, said in a statement.

Greeson said Disney’s streaming service – which is slated for a public unveiling in April – differs from Netflix, Amazon Prime Video and online TV by only offering branded content.

“This is a major studio pooling what is arguably the largest library of high-value content on the planet to populate a single subscription service,” he said.

The report contends Disney+ will be a case study regarding the policy of media companies pulling select content from third-party SVOD providers for their own over-the-top video services.

Indeed, TDG found that while Disney+ appeals to a wide range of consumers, interest varies within several key segments.

Legacy pay-TV subscribers are more strongly interested in Disney+ than both cord-nevers and cord-cutters; Hulu subs are more likely to sign up than are Prime Video and Netflix subs.

“The amount of high-quality content being packed into the offering will make it not only appealing, but very sticky,” Greeson said.

 

Disney Moving All ‘Vault’ Movies to Streaming Service

Disney plans to move all legacy original movie franchises such as The Lion King, 101 Dalmatians, Bambi and The Little Mermaid from its “vault” and onto the pending Disney+ subscription streaming service.

CEO Bob Iger alluded to the change March 7 during the media giant’s annual shareholder meeting in St. Louis.

“At some point fairly soon after launching, [Disney+] will house the entire Disney motion picture library,” Iger said. “So, movies that have traditionally been kept in the vault, and basically been brought out every few years, will be on the [streaming] service,” Iger said.

The Disney Vault was a marketing plan originated by Walt Disney Studios Home Entertainment that put select packaged media release movies, animated features and sequels on retail moratorium.

Disney advertising urged consumers to purchase select titles before they “go into the vault” for a period of years, a move studio marketers felt heightened retail demand.

The marketing was successful as Finding Nemo and Beauty and the Beast rank as the top-selling DVD and sixth best-selling Blu-ray Disc titles, respectively, in the United States.

Nemo, which was released in 2003, has generated more than $677 million from sales of nearly 39 million DVDs. Beast has generated $102 million from 4.5 million Blu-ray units sold.

 

 

 

 

 

Netflix’s Jennifer Gonsky Seeks New Opportunities at Fox Searchlight TV

Original television production is all the rage in Hollywood, especially at Netflix. The SVOD pioneer perhaps overstaffed with VPs mining for original episodic programming.

Jennifer Gonsky, director of global original series at Netflix, has left to join Fox Searchlight TV as head of business affairs — the 11-month-old episodic programming unit of Fox Searchlight Pictures. Gonsky spent 11 years at FX before joining Netflix in 2016.

Jennifer Gonsky

At Netflix Gonsky spearheaded original series “The Chronicles of Narnia,” “Ratched” and “The Politician,” among others.

“I am thrilled with the opportunity to join Fox Searchlight Television,” Gonsky said in a statement. “I’m excited to collaborate with this incredibly passionate team who are working to bring the same high-quality projects and dynamic storytelling that Searchlight Pictures is known for to television audiences.”

Gonsky reports to David Greenbaum and Matthew Greenfield, co-presidents of production for film and television at Fox Searchlight Pictures, in Los Angeles. The company will soon be part of Disney once regulatory approval of its $71.3 billion acquisition of 20th Century Fox Film Corp. is finalized.

 

Disney Outranks Netflix and Amazon Prime in Brand Study

Disney ranked No. 1 followed by Amazon Prime and Netflix in the media and entertainment industry portion of MBLM’s Brand Intimacy 2019 Study.

The study is the largest study of brands based on emotions, according to the company.

Disney rose in the ranking from fifth overall in the 2018 study to first this year.

The remaining brands in the Top 10 for the media & entertainment industry were, in order, PlayStation, YouTube, Xbox, Nintendo, Hulu, HBO and WWE.

MBLM defines Brand Intimacy as “the emotional science that measures the bonds we form with the brands we use and love.” Top intimate brands in the U.S. continued to significantly outperform the top brands in the Fortune 500 and S&P indices in both revenue and profit over the past 10 years, according to the study.

“Media & entertainment continues to be our most intimate industry,” Mario Natarelli, managing partner of MBLM, said in a statement. “The need to escape reality, consume content on demand, and lose ourselves in stories is a powerful combination of factors. Disney is leveraging its nostalgic associations to cultivate stronger bonds with customers. It has also improved its performance with men, while continuing to innovate and expand its offerings.”

Additional findings in the media and entertainment industry were:

  • Disney was the No. 1 brand with both men and women as well respondents aged 45-64;
  • Disney was also the top brand for people making over $100,000;
  • YouTube ranked first for millennials;
  • YouTube also ranked first for those making $35,000-$50,000; and
  • Media and entertainment was also the No. 1 industry for millennials.

The Brand Intimacy 2019 Study is based on the responses of 6,200 consumers and 56,000 brand evaluations across 15 industries in the United States, Mexico and the UAE. To view the media & entertainment industry findings, please click here. To download the full Brand Intimacy 2019 Study or explore the Data Dashboard click here.

IHS: New Video Services to Add $3.6B in Revenue, Saturate Domestic OTT Market

An influx of pending over-the-top video services is projected to add $3.66 billion to the direct-to-consumer entertainment market by 2023, according to new data from IHS Markit.

The research firm said services from Disney, Apple, and WarnerMedia are expected to launch this year, with NBC Universal launching an ad-supported platform to pay-TV subscribers in 2020.

These services have the potential to add 53 million paying subs to the U.S. market by 2023, effectively growing the total number of subs by 25%.

“Subscriber growth of this magnitude assumes an aggressive strategy from all the major services,” Dan Cryan, executive director of research and analysissaid in a statement.

“This strategy could include making movies available earlier or bundling, either at no extra charge or as a low-cost add-on, with other products and services that already have large customer bases. Less aggressive policies would result in lower overall subscriber growth, but they would still expand the video subscription market.“

According to the “Disney, Apple, Netflix: Scenarios for the Future of Online Video” report, Netflix and Amazon Prime Video will continue to lead the market for the next few years. Apple could potentially catch up with Hulu by 2023, depending on what happens to that service after Disney’s acquisition of Fox has been finalized.

“A successful Disney service would also be among the top-tier services in the U.S. by 2023,” Cryan said.

Regardless of Netflix and Prime Video’s market dominance, IHS said the market for pure-play video services will become “exceptionally” competitive. And despite their burgeoning original content spending, studio-driven upstarts bring their own strong content libraries to the equation.